Severance and Exit Costs

Severance and exit costs consist of lease exit costs primarily associated with tower and cell sites, access exit costs related to payments that will continue to be made under our backhaul access contracts for which we will no longer be receiving any economic benefit, and severance costs associated with reductions in our work force.

The following provides the activity in the severance and exit costs liability included in "Accounts payable," "Accrued expenses and other current liabilities" and "Other liabilities" within the consolidated balance sheets:



	March 31, 2017		Net (Benefit) Expense				Cash Payments and Other			December 31, 2017
	(in millions)
Lease exit costs	$	249	$	(12	)	⁽¹⁾	$	(68	)	$	169
Severance costs	12		22			⁽²⁾	(17		)	17
Access exit costs	40		3			⁽³⁾	(21		)	22
	$	301	$	13			$	(106	)	$	208

_________________


(1)	For the three and nine-month periods ended December 31, 2017, we recognized benefits of $3 million and $12 million (Wireless only), respectively, resulting from the reversal of certain lease exit cost reserves associated with the Clearwire WiMAX network which was shutdown on March 31, 2016.


(2)	For the three and nine-month periods ended December 31, 2017, we recognized costs of $17 million ($16 million Wireless, $1 million Wireline) and $22 million ($19 million Wireless, $3 million Wireline), respectively.

(3)

For the three and nine-month periods ended December 31, 2017, we recognized a benefit of $1 million ($9 million benefit Wireless, $8 million costs Wireline) and costs of $3 million ($8 million benefit Wireless, $11 million costs Wireline), respectively. The Wireless benefits resulted from the reduction of certain access exit cost reserves that are no longer required related to previous network initiatives.

We continually refine our network strategy and evaluate other potential network initiatives to improve the overall performance of our network. Additionally, major cost cutting initiatives are expected to continue to reduce operating expenses and improve our operating cash flows. As a result of these ongoing activities, we may incur future material charges associated with lease and access exit costs, severance, asset impairments, and accelerated depreciation, among others.